Postal Service needs assist

John Flattery

Published Thursday August 22, 2013 at 6:00 am

The Aug. 13 Editorials & Commentary pages featured a column by Gail Collins regarding postal reform which seemed to me to be ill-informed and only perpetuates the myths of what is wrong with the Postal Service, as sell as what needs to be done to it.

While many people incorrectly assume the internet is responsible for most of the Postal Service's problems, the fact of the matter is that Postal Service revenues have been boosted by an increase in e-commerce resulting in greater revenues from shipping and package services which effectively offset the effects of online bill paying.

The real problem for the Postal Service stems from an awful recession and the burdensome requirements of a congressional mandate to pre-fund future retiree health benefits in a manner which no other federal agency or corporation of any kind must do.

There are those who believe that cutting six-day delivery and closing thousands of post offices are sure-fire ways to save the Postal Service billions of dollars. In fact, estimates of how much could be saved by making such cuts have been subject to debate due to differing opinions regarding how much business would be lost as a result of those cuts. When you add in the millions of dollars paid to entice thousands of postmasters to retire, the savings may not be as significant as many believed they would be.

Additionally, the Postal Service's Network Rationalization Plan, which has been and will be responsible for the closing or consolidation of hundreds of mail-processing facilities such as the one located in Shrewsbury, was touted as a way to save up to $3 billion.

However, the Postal Regulatory Commission has found that it is virtually impossible to estimate any savings because the market research on potential lost revenue was too problematic.

Right now, the consolidation of the nation's mail-processing network is causing mail to be delayed every day of the week, and as little as 25 percent of first-class mail is delivered overnight. If the Postal Service follows through with their present plan, by early 2014 roughly two-thirds of the mail that used to be delivered overnight will take two, three or more days to reach its destination.

While there are those, like the Postmaster General, who believe that allowing the Postal Service to deliver beer and wine could generate $50 billion a year for the Postal Service, there are some questions as to whether or not micro-breweries and small wineries will have the money or staffing to devote to mail order beer and wine.

What all this means is that there are differing opinions on what needs to be done to help keep the Postal Service healthy, and hopefully Congress can finally move forward with sensible postal reform, such as was passed in the Senate last year.

There is, however, almost nobody who doesn't agree that the major problem facing the Postal Service is the over-the-top congressional mandate for the Postal Service to pre-fund future retiree health benefits for the next 75 years, and to do it in a l0-year period, a requirement of no other government agency or private corporation.

Virtually everyone agrees that the pre-funding requirement goes too far, and — more importantly — it's not even necessary because the Postal Service has already paid enough into this fund to meet the needs of future retirees for decades to come.

What makes matters worse is that were it not for the oppressive pre-funding mandate, the Postal Service would actually be turning a profit. Recently released financial reports show the Postal Service suffered a loss of $3.9 billion year to date; however, these same reports show that the loss included $4.2 billion of expense for the pre-funding requirement.

Without the $4.2 billion charge due to this pre-funding requirement the Postal Service would be showing a profit of more that $300 million so far this year.

If Congress does nothing else this year they must get rid of this ill-conceived pre-funding requirement and move forward with sensible postal reform. But a rush to cut services and slow down the mail is not the sensible way for the Postal Service to survive.

Last year the Senate passed reasonable postal reform with bipartisan support. However, the Republican chairman of the House committee with jurisdiction over the Postal Service would not allow a similar bill with bipartisan support to come up for a vote.

Currently there are two bills which have been introduced which deal responsibly with postal reform — S. 316 and H.R. 630, the "Postal Service Protection Act."

Introduced by Sen. Bernie Sanders and Rep. Peter DeFazio, the legislation would eliminate the ridiculous pre-funding mandate, re-establish overnight service standards for first-class mail, give the Postal Regulatory Commission authority to prevent post office closures, and allow the Postal Service to develop new products and services to generate new sources of revenue.

These bills are a sensible resolution to a problem that Congress created.

John Flattery is president of Central MA Area Local / American Postal Workers Union.